06 May Protecting the next generation of workers with voluntary benefits
Originally posted May 1, 2014 by Andrea Davis on http://ebn.benefitnews.com
As the Affordable Care Act continues to make its presence felt, and as employers look for new ways to control their health care costs and shift more of the responsibility for benefit decision-making on to employees, the role of voluntary benefits is changing. Once viewed as a nice-to-have benefit, some say voluntary benefits should now be advertised and heavily promoted to employees as an important component in their overall portfolio of benefits.
“It’s part of a trend sweeping the industry,” says Chris Hill, CEO of Spotlite, an online enrollment technology company. “This level of [benefits] engagement has never really been required before.”
Rewind a few years to benefit plans with low deductibles and rich benefits and “these supplemental products [were] less relevant,” he says. “Now you’re asking employees to meet a $2,500 or $5,000 deductible and they have to understand how the [health savings account] or [flexible spending account] works with that and why an accident plan, for example, may be complementary to the high deductible plan.”
Millennials in particular can benefit from education about voluntary benefits. While they may view themselves as invincible, they actually have a lot to protect. “They’re not really thinking about all those what-ifs, but probably more than any other generation, they have something to protect,” says Alison Daily, second vice president of clinical and vocational services at The Standard. “They’re very highly educated. A third of them have four-year college degrees, but that comes with a big price tag for them. The average millennial has $29,000 in student loan debt alone.”
And yet millennials are either unaware of voluntary benefits or reluctant to purchase them. Sixty-nine percent of employees age 25-29 don’t own any voluntary benefits, while 71% of those under age 25 don’t own any voluntary products, according to statistics from Eastbridge Consulting Group. Among older age groups, 60% of 45-49-year-olds own some type of voluntary product.
Still, there’s evidence that millenials value voluntary benefits and that the availability of these products may increase employees’ loyalty to the company. According to MetLife’s 12th Annual U.S. Employee Benefit Trends Study, 86% of Generation Y value having benefits personalized to meet their individual circumstances and age.
The challenges of engaging this tech-savvy group are well-known. Millennials have high expectations when it comes to technology and the overall online purchasing process. This is a group that “sends thousands of text messages on a monthly basis,” says Hill. “You’ve got to compete for their limited attention span so those communications need to be highly relevant.”
But for all the talk about how different Millennials are from other generations, Daily believes good communication resonates with everyone, regardless of age. “I think that maybe one of the mistakes people make, or confusion they have, is that the millennials are very different from their non-millennial peers,” she says. “They’re probably not as different as we think.”
Awareness vs. purchase
Still, there are tactics employers can use to better engage millennials in their voluntary benefits, starting with separating the process in their own minds between initial education and purchase.
“You have the initial communication about benefits – what the benefits are, here’s why you should care,” says Hill. Employers should strive for “concise messaging that drives an action and the action you want to drive upfront is getting the employee to learn about what’s offered to them,” he says.
He encourages employers to actively look at email open rates to get a better understanding of subject lines that resonate with millennials. “Relevant information, relevant subject lines, relevant email layouts, relevant electronic communications are going to drive that action,” he says.
Once employers are past that initial awareness phase and on to open enrollment, “you’re adhering to those same principles – how are we going to capture the attention of the user?” says Hill. “Here we actually want to drive decision making about the products.”
It’s that second sale – the actual purchase of voluntary benefits – that gets tricky with millennials, believes Hill, because they tend to say: “I don’t want to call somebody about this product. I want all the information online so I can make a decision. I don’t want to meet with someone or fill out a piece of paper.”
But when it comes to benefits, millennials’ reliance on technology and self-service might be overstated. Face-to-face meetings are still important, even for this generation, says The Standard’s Daily. “I think sometimes [employers] may be thinking it’s got to be glitzy, that they’ve got to text [millennials] or something like that, but really just sitting down with a millennial and going over what these benefits mean … I think it’s the cornerstone to helping them make the right decision.”
The Eastbridge data appear to back up Daily’s assertion. When asked which of several ways they prefer to learn about voluntary benefits, just over half (55%) of employees representing a spectrum of ages chose “speaking with someone in person.” Twenty-one percent, meanwhile, chose “on my own.”
Daily also emphasizes employers shouldn’t feel they have to do all this communication on their own. In fact, she recommends they turn to their benefit brokers and carriers first, before starting any kind of communication program about voluntary. Another tactic, she says, is using peer-to-peer discussions.
“The millennial generation really values recommendations. If you think about looking for a new restaurant you think about Yelp, and the same thing applies to deciding to select disability coverage,” she says. “They’re going to look to their peers to help them make that decision, so having real stories about why colleagues chose to enroll in a benefit may be just what that millennial needs to make that decision to enroll.”
In addition, employers can leverage other successful communication campaigns. “Employers should really think about anything they’ve already done where they successfully communicated to employees and leverage that strategy,” says Daily. “I would look to the leaders of that event and say: ‘What did you do and why did it work?’ Employers may already have some of the skills and they just aren’t thinking about it in that way.”
And while it might seem like a no-brainer, an online enrollment system that facilitates a seamless shopping experience is important for millennials and all employees, for that matter. Not only that, but a mobile site that’s easy to navigate whether employees are using their laptop, iPhone, iPad or Android device.
“If I get an email from Amazon promoting a product I really want and I click on that email and then go on a wild goose chase to find that product, you’re going to lose users and buyers,” says Hill, who also cautions that all the benefit communication in the world is for naught if the buying experience isn’t simple. “If I do a great job communicating these benefits to millennials and then they have to go on to a system that looks like it was built in 1995, and the initial communications are very different than the actual purchase experience, we think that’s really bad. You’re going to lose millennials, who are used to things being easy.”
Among Spotlite’s clients, about 15% of employees use a mobile device to shop for benefits. As mobile devices and smartphones get more sophisticated and make inroads among older generations, Hill only expects this to grow. “Mobile is necessary. It’s something you have to have,” he says. “Enrollment needs to be easy for the end user. So you make it easy by offering it on a computer or a mobile device. It’s a necessary access point for individuals.”